Jefferson v. Hackney (406 U.S. 535)/Dissent Douglas

by William O. Douglas

[p551] MR. JUSTICE DOUGLAS, with whom MR. JUSTICE BRENNAN concurs, dissenting.

I would read the Act more generously than does the Court. It is stipulated that 87% of those receiving AFDC aid are blacks or Chicanos. I would therefore [p552] read the Act against the background of rank discrimination against the blacks and the Chicanos and in light of the fact that Chicanos in Texas fare even more poorly than the blacks. See L. Grebler, J. Moore, & R. Guzman, The Mexican-American People, pts. 2 and 3 (1970); J. Burma, Mexican-Americans in the United States 143-199 (1970); Schwartz, State Discrimination Against Mexican Aliens, 38 Geo. Wash. L. Rev. 1091 (1970); U.S. Commission on Civil Rights, The Mexican American (1968); U.S. Commission on Civil Rights, Mexican Americans and the Administration of Justice in the Southwest (1970). In Rosado v. Wyman, 397 U.S. 397, 413, we said that in administering such a program a State "may not obscure the actual standard of need." Texas does precisely that by manipulating a mathematical formula.

In Rosado, we described how some States establish upper limits or maximums of aid, while others, like Texas, "curtail the payments of benefits by a system of 'ratable reductions' whereby all recipients will receive a fixed percentage of the standard of need." Id., at 409. Then in footnote 13 we described what that meant: "A 'ratable reduction' represents a fixed percentage of the standard of need that will be paid to all recipients. In the event that there is some income that is first deducted, the ratable reduction is applied to the amount by which the individual or family income falls short of need." Id., at 409 n. 13 (emphasis added).

If Texas first deducted outside income and then made its ratable reduction, the welfare recipient would receive a somewhat more generous payment, as the opinion of the Court illustrates in footnote 6 of its opinion. Not only does the Texas system avoid this generous approach, but it also impermissibly constricts the standard of need in conflict with Rosado, Dandridge v. Williams, 397 U.S. 471, [p553] and Townsend v. Swank, 404 U.S. 282. Under Texas' method of computation, a family—otherwise eligible for AFDC benefits but with nonexempt income greater than the level of benefits and less than the standard of need—is denied both AFDC cash benefits and other noncash benefits such as medicaid.^[1] It seems inconceivable that Congress could have intended that noncash benefits be denied those with incomes less than the standard of need solely because that income was earned rather than from categorical assistance. Yet this is precisely the result sanctioned by the Court today because eligibility for these programs is tied to the receipt of cash benefits.^[2]

[p554] One of the stated purposes of the AFDC program is "to help such parents or relatives [of needy dependent children] to attain or retain capability for the maximum self-support and personal independence." 42 U.S.C. § 601 (emphasis added). The Senate Finance Committee has stated, "A key element in any program for work and training for assistance recipients is an incentive for people to take employment." S. Rep. No. 744, 90th Cong., 1st Sess., 157 (1967) (emphasis added). The majority acknowledges that "[t]he history and purpose of the Social Security Act... indicate Congress' desire to help those on welfare become self-sustaining." Ante, at 544. But it nonetheless ignores the explicit congressional policy in favor of work incentives and upholds a system which provides penalties and disincentives for those who seek employment.^[3]

[p555] The California Supreme Court in Villa v. Hall, 6 Cal. 3d 227, 490 P. 2d 1148, struck down the system this Court approves today, where California used a statutory maximum of payments rather than a ratable reduction. The California Supreme Court quite properly said that what the State was attempting was inconsistent with Rosado. Moreover, it had an additional reason:

"The conclusion that the Social Security Act requires outside income to be subtracted from standards of need rather than from statutory maximums or ratable reductions is also founded on a strong public policy of encouraging welfare recipients to become constantly more self-supporting. Yet deducting income from statutory maximums makes gainful employment significantly less attractive to the recipient. This follows because all nonexempt income will be offset directly against the amount of the grant and not against the standard of need to determine actual need; for every nonexempt dollar earned, the amount of aid will therefore be decreased one dollar. Since the grant is always less than the standard of need, in many instances the system adopted by the Welfare Reform Act will result in an individual's need not being met even after adding both exempt and nonexempt income to the AFDC payment. Such recipients will be forced to exist below the bare minimum necessary for adequate care, even though they have commenced, by obtaining employment, to break free from the debilitating 'welfare syndrome.' The practice thus conflicts with [p556] the stated federal policy to provide incentives to obtain and maintain an employment status." Id., at 235-236, 490 P. 2d, at 1153-1154.

Moreover, Townsend v. Swank, 404 U.S. 282, calls for a reversal in the present case. It is conceded that plaintiff Maria T. Davilla and 2,470 other families are denied aid in Texas by reason of its new formula, see 304 F. Supp. 1332, 1343, despite the fact that their income is below the standard of need and that of those receiving AFDC aid only 75% of their needs is met.^[4]

Under § 402 (a)(10) of the Social Security Act (which governs AFDC) "aid to families with dependent children shall be furnished with reasonable promptness to all eligible individuals." 42 U.S.C. § 602 (a)(10). In Townsend children 18 through 20 years of age who attended high school or vocational training were eligible for AFDC benefits but such children in college were not eligible. We held that "a state eligibility standard that excludes persons eligible for assistance under federal AFDC standards violates the Social Security Act and is therefore invalid under the Supremacy Clause."^[5] 404 U.S., at 286.

[p557] What Texas does here is to exclude large numbers of AFDC beneficiaries by application of a state eligibility test that is narrower than the one we approved in Rosado. While a State has some discretion in its use of federal funds, it may not manipulate by its own formula groups of "needy" claimants. The decision to participate or not in the federal program is left to the States. Townsend v. Swank, supra, at 290-291. When, as here, federal and state funds are in short supply, the problem is not to lop off some categories of those in "need" but to design a way of managing the system of "need" so as not to raise equal protection questions.^[6] Id., at 291.

[p558] Section 402 (a)(10) of the Social Security Act provides that AFDC shall be furnished with reasonable promptness to all eligible individuals. The House Report in commenting on it said:

"Shortage of funds in aid to dependent children has sometimes, as in old-age assistance, resulted in a decision not to take more applications or to keep eligible families on waiting lists until enough recipients could be removed from the assistance rolls to make a place for them.... [T]his difference in treatment accorded to eligible people results in undue hardship on needy persons and is inappropriate in a program financed from Federal funds." H.R. Rep. No. 1300, 81st Cong., 1st Sess., 48 (1949).

As the Court said in Dandridge v. Williams, 397 U.S., at 481, "So long as some aid is provided to all eligible families and all eligible children, the statute itself is not violated." It is violated here because nearly 2,500 families that satisfy the requirements of "need" are denied any relief.^[7]

Notes

1. The Court's acknowledgment that "[t]he Texas computation method eliminates any... financial incentive [for welfare recipients to obtain outside income], so long as the[ir] outside income remains less than the[ir]... reduced standard of need," ante, at 541, understates the effect of the Texas system on the recipients. The Texas system not only fails to provide an incentive for those on the welfare rolls to break the cycle of poverty by obtaining employment, but—in certain cases—it also penalizes those who seek employment. The family with nonexempt income equal to Texas' level of benefits stands in much the same cash position as the AFDC recipient, but solely because that family has earned that last marginal dollar that makes it no longer eligible for categorical assistance it also is denied medical assistance, social services, and training. The Solicitor General tells us that the value of the medical services alone is worth $50-$60 per month to the average Texas AFDC family. Memorandum for the United States as Amicus Curiae 7 n. 5.
2. Eligibility for family development services is keyed to the "recei[pt] [of] aid to families with dependent children," 42 U.S.C. § 602 (a)(14); so, too, with employment assistance, id., at § 602 (a)(15)(A) ("receiving aid under the plan"); protection against child's neglect or abuse, id., at § 602 (a)(16) ("receiving aid"); plans to establish paternity and secure support, id., at § 602 (a)(17)(A)(i) and (ii) ("receiving aid," "receiving such aid"); work incentive programs, id., at § 602 (a)(19)(A)(i) ("receiving aid to families with dependent children"); and medical assistance plans, id., at § 1396a (a)(10) ("individuals receiving aid or assistance").

   Would Congress have tied needy families' eligibility for these programs to the receipt of cash benefits had it foreseen that this Court would disregard the statutory mandate "that aid to families with dependent children shall be furnished with reasonable promptness to all eligible individuals"? 42 U.S.C. § 602 (a)(10).

3. The rationale which the Court uses to reach this result is' at odds with time-honored rules of statutory interpretation. First, the Court gives but a grudging interpretation to the recital in §401 of the Act, 42 U.S.C. § 601, that one of Congress' purposes was to en- courage welfare recipients to become self-supporting. The Court in effect disregards the rule that recitals embody "the general purposes which... Congress undertook to achieve." Carter v. Carter Coal Co., 298 U.S. 238, 297. And see Coosaw Mining Co. v. South Carolina, 144 U.S. 550, 563; United States v. Fisher, 2 Cranch 358, 386. Second, the Court attributes to Congress the purpose of providing work incentives, e. g., 42 U.S.C. § 602 (a)(8), while at the same time allowing the imposition of penalties and disincentives for obtaining employment. The Court departs from the principle that "[i]n the exposition of statutes," various sections of the same act "are supposed to have the same object," Kohlsaat v. Murphy, 96 U.S. 153, 159-160, and holds instead that Congress was working at cross-purposes in different subsections of § 402, 42 U.S.C. § 602. Finally, by giving the Social Security Act a miserly interpretation, the Court disregards the canon that remedial legislation, such as the Social Security Act, is to be interpreted liberally to effectuate its purposes. E. g., Peyton v. Rowe, 391 U.S. 54, 65.
4. The percentages of need that will be met by Texas under the various heads are as follows:

   Old Age Assistance	100%
   Aid to the Blind	95%
   Aid to the Permanently and Totally Disabled	95%
   Aid to Families with Dependent Children	75%

   When this action was instituted, Texas' AFDC percentage level of benefits was only 50% of the standard of need. During the course of this litigation, Texas increased the AFDC level of benefits to 75% of need.

5. To the same effect is our recent decision in Engelman v. Amos, 404 U.S. 23 (1971), aff'g sub nom. X v. McCorkle, 333 F. Supp. 1109 (NJ 1970). There, relying on Rosado v. Wyman, 397 U.S. 397, the District Court held inconsistent with the Social Security Act—and thus unconstitutional under the Supremacy Clause—a state provision which denied AFDC cash payments and ancillary benefits to those whose nonexempt income was less than the standard of need established by the State. We unanimously affirmed that decision. To be sure, Engelman dealt with federal provisions different from those presently in issue (42 U.S.C. § 602 (a)(8)(A)(ii); 45 CFR § 233.20 (a)(3)(ii)), but that does not distinguish the case. Rather, it merely emphasizes that which—until today—was the broad scheme of the Social Security Act: those whose nonexempt income was below the standard of need established by the State and who met the other nonfinancial criteria for eligibility were to receive benefits. See 42 U.S.C. § 602 (a)(10).
6. To be sure, "[t]here is no question that States have considerable latitude in allocating their AFDC resources, since each State is free to set its own standard of need and to determine the level of benefits by the amount of funds it devotes to the program." King v. Smith, 392 U.S. 309, 318-319 (footnotes omitted). Accommodation of a State's limited financial resources, however, is to be made in setting the level of benefits and not by gerrymandering the standard of need. Rosado v. Wyman, supra, at 413. Here, the "reduced standard of need" which the majority recognizes to be the consequence of the Texas computation procedures, ante, at 543 n. 10, violates § 402 (a)(23) of the Social Security Act, 42 U.S.C. § 602 (a)(23), and our decision in Rosado. Section 402 (a)(23) mandated an upward revision of the standard of need, and the "reduced standard of need" Texas applies to certain of its needy violates this requirement.
7. 45 CFR § 233.10 (a)(1)(ii) provides:

   "The groups selected for inclusion in the plan and the eligibility conditions imposed must not exclude individuals or groups on an arbitrary or unreasonable basis, and must not result in inequitable treatment of individuals or groups in the light of the provisions and purposes of the public assistance titles of the Social Security Act."